Akebia Therapeutics Inc (AKBA)

[StkMktPirate]

Why is this stock mispriced?

Investors were rightfully disappointed that PRO2TECT missed on the safety endpoint, as the NDD patient pool is much, much larger than the DD patient pool. Still, our model shows that even just assuming a reasonable market share for DD patients alone (in the US and EU) is enough to qualify this stock as a buy (keep in mind that vadadustat has already been approved and launched in Japan for both DD and NDD indications).

One of our favorite types of stocks to look for is one that has been oversold based on fear. We think AKBA fits the bill. Competitor FGEN actually finished down 7% on the day after being up 15% premarket on the AKBA trial failure news. Granted, the market was down about 3% on September 3. But if AKBA's trial failure truly meant that it was out of the competition for the multi-billion dollar market that is anemia due to CKD, then we think FGEN's stock would have reacted positively and been able to sustain its gain.

Instead, we think that AKBA was overly punished, and that the drop in its share price was more severe than the actual news. For this reason, we think the drop was an overreaction and that the stock is mispriced.

https://seekingalpha.com/article/4374119-akebia-therapeutics-drop-from-missed-safety-endpoint-offers-good-reentry-point